Grocery Guru Episode #39:Russian Supermarket Discounters Join Andrew Grant and Darren A. Smith in the thirty-ninth episode of the Grocery Guru. They discuss the Russian Supermarket Discounters Opening Stores in the UK. How it will affect the UK's supermarkets. Particularly Aldi and Lidl. Plus, supermarkets like the 'X5 Retail Group' and their innovative approach and different model. You Can Read the Full Russian Supermarket Discounters Transcript Below: Darren A. Smith: Hello, and welcome to Grocery Guru. This is episode 39 and we are here with that grocery guru. Andrew, how are you? Andrew Grant: Morning Darren. Yes, very good. Thank you. Darren A. Smith: So, this week we're going to talk about the introduction into the UK of the Russian supermarket discounters, and I've got some information here, but I probably haven't got the experience you've got. What's your recollection of Russian supermarket discounters coming to Britain? Andrew Grant: Well, they haven't. So this is... Yeah, this is really interesting actually. They're called Mere and they want to open 30 stores in the next year, sorry 300 stores in the UK in the next year. The first one is opening towards the end of this month. Darren A. Smith: Yes. Now, I do remember when discounters came before, and you probably do, Europe Tesco. What's your recollection of that? Andrew Grant: Yeah, well this is the interesting thing, because I can remember being at Tesco, the first Aldi opened, and we'd already seen, I'd already seen Aldis in Germany and I still got this vivid recollection of going into an Aldi in Germany and in the chiller cabinet, the deli cabinet, there was a rusty knife hanging from a string and people were cutting their own lengths of salami. I'd never seen anything so unhygienic in my life. And so, the minute we found out that the first Aldi was opening, we thought, there's no way British shoppers are going to be picking knives up out of cabinets and cutting their own lengths of salami and sausage. They won't shop in those sorts of conditions. And then of course, well everybody knows the history, Aldi and Lidl landed, just touched something within the British psyche for a quality bargain, and I think quality is the important thing, a quality bargain and together they've now got a share bigger than Asda and Sainsbury's. Russian Supermarket Discounters Darren A. Smith: And I've got something similar on my recollection as a very junior buyer in, I think, it was the early 90s was, there was a guy called Tom Viner, who I think was probably CEO at the time. His initials were RTV, which I never quite understood, and then I realized his first name was Rudolph, but no one was allowed to call him Rudolph because they started doing red nose jokes. Anyway, so Tom was at a conference at the front and he was saying, he read out this clip from newspaper. It said the discounters are coming. And his point was, we all went, "Yeah, that's bad, Tom." He went, "No, this was written in 1902." He was trying to say to us that it comes every few years, it's cyclical that the discounters come and not to worry, but actually I think he was wrong because to your point, they've got a hell of a market share. Andrew Grant: Yeah. But I think my take is that this is actually really good news for the likes of Tesco and Sainsbury's, because it's going to give Aldi and Lidl one major pain in the whatsit to have to sort out. So this Mere group, they're planning to undercut Lidl and Aldi by 20% to 30%. I mean that is cheap, that is cheap as chips. But when you look at the pictures of the stores and anybody that's interested should have a look, there's an article of the Leipzig store that Mere recently opened. I mean, their model is quite interesting. All the stores are leased. On the cheapest possible buildings that they can find as long as it's near a main road. But the most interesting thing about the model is, suppliers own the stock until it's sold to a customer...